THE LIBERAL Democrats were heading for a coalition with Labour in the Scottish Parliament despite indications that the party would fail to win anything like the 22 seats predicted by their leader, Jim Wallace, in the final stages of the campaign.

The BBC's exit poll gave them 11 per cent of the vote, 2 per cent less than they secured in the 1997 general election and putting them into fourth place behind the Conservatives.

In the first seat to be declared, Hamilton South, the Lib Dems were beaten into fourth place by the Tories, as happened in the 1997 general election. However, they were comforted that they increased their share of the vote by three per cent. Comparing the much higher vote secured by Liberal Democrats south of the border, one party worker said: "Sometimes I think I should emigrate to England.We do so much better down there because there are fewer parties."

However, at a Scottish Liberal Democrats election party in Edinburgh Lord David Steel, the party's former leader, was upbeat. He predicted that bartering over whether to join a coalition with Labour would begin tomorrow. Lord Steel, standing for a list seat in the Lothians, said: "If the exit polls are accurate then ... we will be talking about a coalition. The party will be meeting on Saturday to start the internal debate about coalition. Despite what people say, there was no agreement before the election on joining with Labour." Asked if the exit poll predictions were disappointing, he said: "It is within the range of what we were expecting."

Michael Moore, the Scottish Liberal Democrats' campaign manager, said: "We think coalition would be good for Scotland, but getting into government is not our main objective. We are wanting to shape the government of Scotland. What matters is the policies the parliament delivers rather than getting bums on seats in government."

Mr Moore, who won Lord Steel's old Westminster seat of Tweeddale, Ettrick and Lauderdale in 1997, commented on the low turnout in some areas. He said he was disappointed that the Scottish Parliament campaign had failed to improve the level of debate. "The American style of negative campaigning has been depressing. Politicians have yet to prove that a new politics has arrived in Scotland."

The Liberal Democrats had been hoping at the very least to secure more than the ten Westminster seats they won in Scotland in 1997. Earlier this week, Mr Wallace said: "We are doing better now than we were in May 1997 and I am absolutely sure we will defend the seats we won then successfully."

The Liberal Democrats are, however, likely to be satisfied with taking a slice of power in a coalition. Throughout the campaign, they steered clear of attacking Labour as fiercely as in previous campaigns. They focused chiefly on opposing Labour's policy of introducing university tuition fees, a policy that Labour may need to abandon in Scotland to secure Liberal Democrat backing in the Scottish Parliament.